Strayer Fin 534 Finals Part 2 Solutions (100% Score)

profilegeniusy_2006
 (Not rated)
 (Not rated)
Chat

1.      Which of the following is NOT normally regarded as being a good reason to establish an ESOP

2.      Which of the following is NOT normally regarded as being a barrier to hostile takeovers

3.      Which of the following statements is correct

4.      Grandin Inc. is evaluating its dividend policy. It has a capital budget of $625,000, and it wants to maintain a target capital structure of 60% debt and 40% equity. The company forecasts a net income of $475,000. If it follows the residual dividend policy, what is its forecasted dividend payout ratio

5.      Which of the following statements is correct

6.      If a firm adheres strictly to the residual dividend policy, the issuance of new common stock would suggest that

7.      Which of the following statements is correct

8.      Which of the following statements is NOT correct

9.      If a firm adheres strictly to the residual dividend policy, then if its optimal capital budget requires the use of all earnings for a given year (along with new debt according to the optimal debt/total assets ratio), then the firm should pay

10.  Which of the following statements is CORRECT

11.  Which of the following statements is CORRECT

12.  Companies HD and LD have identical tax rates, total assets, and basic earning power ratios, and their basic earning power exceeds their before-tax cost of debt, rd. However, Company HD has a higher debt ratio and thus more interest expense than Company LD. Which of the following statements is CORRECT

13.  Which of the following events is likely to encourage a company to raise its target debt ratio, other things held constant

14.  Which of these items will not generally be affected by an increase in the debt ratio

15.  Two operationally similar companies, HD and LD, have the same total assets, operating income (EBIT), tax rate, and business risk. Company HD, however, has a much higher debt ratio than LD. Also HD's basic earning power (BEP) exceeds its cost of debt (rd). Which of the following statements is CORRECT

16.  Which of the following statements is CORRECT

17.  Which of the following actions should Reece Windows take if it wants to reduce its cash conversion cycle

18.  Which of the following is NOT directly reflected in the cash budget of a firm that is in the zero tax bracket

19.  A lockbox plan is

20.  Which of the following will cause an increase in net working capital, other things held constant

21.  Firms generally choose to finance temporary current operating assets with short-term debt because

22.  Which of the following statements is most consistent with efficient inventory management? The firm has a

23.  Suppose a carton of hockey pucks sell in Canada for 105 Canadian dollars, and 1 Canadian dollar equals 0.71 U.S. dollars. If purchasing power parity (PPP) holds, what is the price of hockey pucks in the United States

24.  Suppose one U.S. dollar can purchase 144 yen today in the foreign exchange market. If the yen depreciates by 8.0% tomorrow, how many yen could one U.S. dollar buy tomorrow

25.  Which of the following is NOT a reason why companies move into international operations

26.  In Japan, 90-day securities have a 4% annualized return and 180-day securities have a 5% annualized return. In the United States, 90-day securities have a 4% annualized return and 180-day securities have an annualized return of 4.5%. All securities are of equal risk, and Japanese securities are denominated in terms of the Japanese yen. Assuming that interest rate parity holds in all markets, which of the following statements is most CORRECT

27.  Suppose Yates Inc., a U.S. exporter, sold a consignment of antique American muscle-cars to a Japanese customer at a price of 143.5 million yen, when the exchange rate was 140 yen per dollar. In order to close the sale, Yates agreed to make the bill payable in yen, thus agreeing to take some exchange rate risk for the transaction. The terms were net 6 months. If the yen fell against the dollar such that one dollar would buy 154.4 yen when the invoice was paid, what dollar amount would Yates actually receive after it exchanged yen for U.S. dollars

28.  If the inflation rate in the United States is greater than the inflation rate in Britain, other things held constant, the British pound will

29.  Suppose 1 U.S. dollar equals 1.60 Canadian dollars in the spot market. 6-month Canadian securities have an annualized return of 6% (and thus a 6-month periodic return of 3%). 6-month U.S. securities have an annualized return of 6.5% and a periodic return of 3.25%. If interest rate parity holds, what is the U.S. dollar-Canadian dollar exchange rate in the 180-day forward market

30.  A U.S.-based importer, Zarb Inc., makes a purchase of crystal glassware from a firm in Switzerland for 39,960 Swiss francs, or $24,000, at the spot rate of 1.665 francs per dollar. The terms of the purchase are net 90 days, and the U.S. firm wants to cover this trade payable with a forward market hedge to eliminate its exchange rate risk. Suppose the firm completes a forward hedge at the 90-day forward rate of 1.682 francs. If the spot rate in 90 days is actually 1.638 francs, how much will the U.S. firm have saved or lost in U.S. dollars by hedging its exchange rate exposure


 

    • 10 years ago
    Strayer Fin 534 Finals Part 2 Solutions (100% Score)
    NOT RATED

    Purchase the answer to view it

    blurred-text
    • attachment
      fin_534__finals_part_2____100_score.docx